Financial market products & services update

*Financial market.

*Financial market.

17 December 2015, Sweetcrude, Houston – Local and international financial market products and services update.
NIGERIA: The Minister of State for Petroleum Resources, Dr. Ibe Kachikwu, on Wednesday said the federal government decided to do away with the country’s former practices of Offshore Processing Agreements (OPAs) and the crude swaps, and other unprofitable products and crude oil arrangements because it wanted to eliminate rent seekers from benefitting from the country’s oil and gas resources.
He explained that the ongoing reforms which the government is undertaking in the country’s oil industry is aimed at, “having the right people, doing the right things, at the right time, for the right purpose to yield the right results.”
A statement from the Group General Manager, Public Affairs of the Nigerian National Petroleum Corporation, Ohi Alegbe, disclosed that the minister told members of the National Assembly that stopping the OPAs and all others was all in a bid to avoid rent seekers and add value to the Nigerian hydrocarbon resources.

FIXED INCOME: Another quite day in the Fixed Income market yesterday. More selling in bonds from locals led by the July 2034s while April 2017s saw some demand as it tracks the T-bill market closely.
We expect to see a mixed reaction today as the market will take a cue from the Primary Auction results that printed yesterday.

FX: The CBN intervention rate remained at $/NGN 196.97 and a special intervention auction was announced for Friday the 18th of Dec 2015.

COMMODITIES: Goldman Sachs Group Inc. took the ax to its iron ore forecasts, predicting the price will remain under $40 a ton for the next three years as China’s slowdown forces the global industry into a long period of hibernation.
Iron ore will average $38 a metric ton next year and $35 in both 2017 and 2018, analysts Christian Lelong and Amber Cai wrote in a report received on Thursday. The new forecasts are 13% to 14% lower than the bank’s previous outlook.

U.S: Stocks and the dollar climbed, while Treasuries recouped losses as the first U.S. interest-rate increase in almost a decade was welcomed across Asian markets.
Japanese shares jumped more than 1%, Chinese stocks advanced and gauges of regional equity volatility declined after the well-telegraphed decision, which saw Federal Reserve Chair Janet Yellen emphasize further tightening would be slow. The dollar climbed versus the euro and the New Zealand currency, while the Yuan retreated for a record 10th day. Treasuries gained, with 30-year notes reversing Wednesday’s drop. Oil traded below $36 a barrel after tumbling earlier this week to the lowest since 2009.

CHINA: China’s stocks rose to a two-week high as funds flowed back to the equities market after a recent spate of initial public offerings, while the Yuan weakened for a record 10th day, bolstering the outlook for exports. Property developers and consumer-discretionary companies led gains. The Shanghai Composite Index climbed 1.6% to 3,572.14 at 1:03 p.m. The Chinese currency headed for its longest losing streak since at least 2007. The Hang Seng China Enterprises Index rose 1.7% for its steepest two-day advance since October after the Federal Reserve signalled a gradual pace for future interest-rate increases.

Macro Economic Indicators
Inflation rate (Y-o-Y) for November 2015           9.37%
Monetary Policy Rate current                               11.00%
FX Reserves (Bn $) as at December 11, 2015     29.463

Money Market Highlights

O/N                                0.9983
30 Day                           8.3703
90 Day                          10.4491
180 Day                        12.6325
USD 1 Month              0.3505
USD 2 Months           0.4367
USD 3 Months           0.5257
USD 6 Months           0.7550

Benchmark Yields
Tenor      Maturity      Yield (%)

91d            17-Mar-16        1.92
182d         30-Jun-16        4.30
364d         01-Dec-16        5.84
2y              31-Aug-17        9.02
3y              30-May-18      9.65
5y              13-Feb-20      11.03

Indicative Currency Exchange Rates
Bid         Offer

USDNGN         197.00       198.97
EURUSD          1.0771        1.0974
GBPUSD          1.4873        1.5075
USDJPY           122.28        122.32
USDCHF         0.98955     0.9996
GBPEUR          1.3675        1.3879
USDZAR        14.8526      15.0567

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